The embarrassment of losing confidential personal details of 25million people is just the latest fiasco to hit the Treasury in a matter of days.

The beleaguered department has not recovered yet from the revelations that taxpayers could foot a £24billion bill to support the troubled Northern Rock bank.

Alistair Darling in the Commons on Tuesday

But Chancellor Alistair Darling insists he will not quit despite increasing pressure. His House of Commons statement was the second grilling he has faced in two days.

Gordon Brown also felt the heat as it was his decision as Chancellor in 2005 to merge the old Inland Revenue with Customs to create Whitehall’s biggest department – despite thousands of job cuts.

An executive board was created to run the giant ministry, which was not only responsible for tax gathering but also for operating the complicated tax credit system.

Mark Serwotka, general secretary of the Public and Commercial Services Union, said: ‘The extremely serious loss of confidential data should be set in the context of the enormous pressure being placed on Her Majesty’s Revenue and Customs by Government- imposed job cuts totalling 25,000 by 2011.’

He said the department was undergoing ‘massive restructuring’ and would see ‘large scale office closures’.

The debacle marks the culmination of a difficult few months for the Government. Since Mr Brown’s much-criticised announcement of troop cuts during the Tory Party conference and the Opposition’s headline-grabbing Inheritance Tax proposals, his administration has been on the back foot.

The Home Office has been a particular source of problems.

Home Secretary Jacqui Smith had to deal with accusations of spin after it emerged she had refused to reveal that 5,000 illegal immigrants had been given clearance to work in security jobs.

Mr Brown has also been attacked for his ‘British jobs for British people’ pledge when it was revealed more than half of new jobs under Labour had gone to immigrants.

HMRC’s list of security failings

There has been a catalogue of security breaches at HM Revenue and Customs in recent months.

Just two weeks ago, confidential records of 15,000 people on a computer disc were lost on their way to Standard Life’s pensions department. In September, a laptop was stolen from an official, who left it in his car overnight. It contained the details of 400 ISA holders.

And in May, the bank details of 42,000 families receiving tax credits were revealed to other people due to a faulty printer.